Peripheral nerve injuries have common clinical problems that are often accompanied by sensory and motor dysfunction and failure of axonal regeneration. Although various therapeutic approaches have been attempted, full functional recovery and axonal regeneration are rarely achieved in patients. In this study, we investigated the effects of recombinant adeno-associated virus (AAV) of mesencephalic astrocyte-derived neurotrophic factor (AAV-MANF) or placental growth factor (AAV-PlGF) transduced into mesenchymal stem cells (hMSC-MANF and hMSC-PlGF), which were then transplanted using human decellularized nerves (HDN) into sciatic nerve injury model. Our results showed that both AAV-MANF and AAV-PlGF were expressed in MSCs transplanted into the injury site. Behavioral measurements performed 2, 4, 6, 8, and 12 weeks after injury indicated that MANF facilitated the rapid and improved recovery of sensory and motor functions than PlGF. In addition, immunohistochemical analysis was used to quantitatively analyze the myelination of neurofilaments, Schwann cells, and regrowth axons. Both hMSC-MANF and hMSC-PlGF increased axon numbers and immunoreactive areas of axons and Schwann cells compared with the hMSC-GFP group. However, hMSC-MANF significantly improved the thickness of axons and Schwann cells compared with hMSC-PlGF. G-ratio analysis also showed a marked increase in axon myelination in axons thicker than 2.0 μm treated with MANF than that treated with PlGF. Our study suggests that transplantation of hMSC transduced with AAV-MANF has a potential to provide a novel and efficient strategy for promoting functional recovery and axonal regeneration in peripheral nerve injury.Copyright © 2023 Elsevier Inc. All rights reserved.